Macrophage-mediated inflammation underlies the development of the metabolic syndrome and its associated diseases, including nonalcoholic fatty liver disease (NAFLD). NAFLD is the most common liver disease in the United States and has no proven therapy. Critical to the development of an effective treatment for this disease is an understanding of how a benign fatty liver progresses to hepatocellular injury and inflammation or steatohepatitis that leads to chronic liver disease. Macrophages can be activated by various stimuli and undergo polarization into proinflammatory M1 or anti-inflammatory M2 macrophages. A preponderance of M1 macrophages promotes tissue inflammation and occurs in adipose tissue in obesity-related diseases. Central to NAFLD development is an increase in serum free fatty acids (FFAs) and their excessive deposition in tissues. Saturated FFAs can trigger M1 macrophage polarization, suggesting that alterations in the metabolism of these FFAs may modulate the inflammatory response in NAFLD. The objective of this proposal is to delineate mechanisms by which the lysosomal degradative pathway of autophagy plays a central role in preventing the development of steatohepatitis. Our previous investigations identified a novel function for autophagy in the regulation of lipid metabolism. Autophagy mediates the lipolytic breakdown of stored lipids into free fatty acids and maintains levels of mitochondrial -oxidation, suggesting a critical role for autophagy in cellular pathways regulated by lipid metabolism. In addition, preliminary studies have identified a function for autophagy in down regulating the proinflammatory activation and polarization of macrophages by inflammatory mediators including FFAs. These findings indicate that autophagy functions to regulate innate immunity in response to elevated FFAs that occur with NAFLD. Based on these and other preliminary studies, our central hypothesis is that the effects of autophagy on macrophage lipid metabolism are critical to prevent the development of liver injury and inflammation in hepatic steatosis. We will test this hypothesis by delineating the mechanisms by which autophagy-mediated effects on lipid breakdown regulate macrophage activation in studies contained in three Specific Aims. First, we will test the hypothesis that autophagy down regulates the innate immune response by blocking proinflammatory macrophage activation and polarization. Second, we will examine whether autophagy inhibits proinflammatory macrophage activation and polarization through effects on lipid metabolism. Third, we will test the hypothesis that decreased autophagy in macrophages in vivo promotes the development of liver injury and inflammation in the setting of hepatic steatosis. The objective of these studies is to delineate novel paradigms by which the effects of autophagy on macrophage lipid metabolism function to block development of a proinflammatory state. The findings will suggest that the impairment in autophagy that occurs with obesity and aging leads to the development of steatohepatitis by effects on the immune response. By uncovering this new mechanism for the development of steatohepatitis, novel approaches to the prevention and treatment of NAFLD may be found.